WEST PALM BEACH, Fla., Sept. 26, 2002 (PRIMEZONE) -- Ocwen Financial Corporation (NYSE:OCN) today announced a series of debt reductions, as approved by its Board of Directors, that will reduce its notes, debentures and interest bearing debt obligations by $73.5 million. As of June 30, 2002 the Company had $157.6 million of such obligations outstanding. The Company estimates that the combined result of these actions will reduce interest expense by approximately $8.0 million over the next twelve months and result in a net cost savings of approximately $4.7 million during the same period.
The Company will exercise its redemption option to call $40 million of its outstanding 11.875% Notes due October 2003. As of June 30, 2002, $86.3 million of these notes were outstanding. The Company will exercise its call privileges at a price of 102.969% as provided for in the terms of the indenture. The Company estimates that this action will reduce its interest expense by approximately $4.0 million over the remaining life of the Notes and will result in approximately $2.2 million of net cost savings during that period.
The Company's wholly owned subsidiary, Ocwen Federal Bank FSB ("The Bank") will exercise its redemption option to call $33.5 million of its 12% Subordinated Debentures due 2005. As of June 30, 2002, $67 million of these debentures were outstanding. The Bank will exercise its call privileges at a price of 102.667% as provided for in the terms of the indenture. The Bank estimates that this action will reduce its interest expense by approximately $4.0 million over the next twelve months and will result in net cost savings of approximately $2.5 million during that period.
In addition to these actions, the Company's wholly owned subsidiary, Ocwen Asset Investment Corporation ("OAIC"), will redeem the $0.045 million of its 11.5% Notes due 2005 that remain outstanding following the tender offer executed in December 2000. OAIC will exercise its call option at a price of 105.75% as provided for in the terms of the indenture. This action will fully retire this series of Notes and eliminate the associated administrative requirements. No material impact will result from this transaction.
Ocwen Financial Corporation is a financial services company headquartered in West Palm Beach, Florida. The Company's primary business is the servicing and special servicing of nonconforming, subperforming and nonperforming residential and commercial mortgage loans. Ocwen also specializes in the development of related loan servicing technology and software for the mortgage and real estate industries. Additional information about Ocwen Financial Corporation is available at www.ocwen.com.
Certain statements contained herein may not be based on historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by reference to a future period(s) or by the use of forward-looking terminology such as "save," "reduce," "estimate," "result," future or conditional verb tenses, similar terms, variations on such terms or negatives of such terms. Actual results could differ materially from those indicated in such statements due to risks, uncertainties and changes with respect to a variety of factors, including changes in market conditions as they exist on the date hereof, applicable economic environments, government fiscal and monetary policies, prevailing interest or currency exchange rates, effectiveness of interest rate, currency and other hedging strategies, laws and regulations affecting financial institutions, and other risks detailed from time to time in OCN's reports and filings with the Securities and Exchange Commission (the "SEC"), including its periodic reports on Forms 8-K, 10-Q and 10-K, including Exhibit 99.1 attached to OCN's Form 10-K for the year ended December 31, 2001, which filings are available from the SEC. Undue reliance should not be accorded forward-looking statements, which speak only as of the date they are made. OCN undertakes no obligation to publicly update or revise forward-looking statements.